On Thursday, the IMF in its World Economic Outlook Update retained India’s growth projection for current year at 7.5 per cent which will be higher than China’s 6.8 per cent. In the forecast, IMF also projected 7.5 per cent growth rate for India in 2016, as against China’s 6.3 per cent for that year.
China was the fastest growing economy in 2014 at 7.4 per cent as against India’s 7.3 per cent, as per the IMF data.
IMF’s growth projection for India is lower than the estimates of the Indian Finance Ministry and the Reserve Bank of India. The Finance Ministry expects GDP growth to be 8 to 8.5 per cent in 2015-16, while the Reserve Bank of India has estimated it to be 7.6 per cent.
Interestingly, IMF has lowered global growth forecast for 2015 from 3.5 per cent to 3.3 per cent. But the global growth projection for 2016 has been retained at 3.8 per cent.
“Global growth is projected at 3.3 per cent in 2015, marginally lower than in 2014, with a gradual pickup in advanced economies and a slowdown in emerging market and deveoping economies. In 2016, growth is expected to strengthen to 3.8 per cent,” the report said.
For both India and China, IMF has retained the projection it made earlier in the month of April.
However, growth in emerging market and developing economies has been estimated at 4.2 per cent in 2015, down 0.1 per cent from the projection made in April.
But a rebound in activity in a number of distressed economies is expected to result in a pickup in growth in 2016.